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Labor, Greens to curtail debt limit increase

ELEANOR HALL: Let's go now to Canberra and Labor and the Greens will force the Federal Government to come back to the Parliament again if it wants to raise the Commonwealth's debt limit to half a trillion dollars.

Today the Government is introducing a bill to increase the limit by $200 billion and it's accusing the Opposition of adopting US style Tea Party tactics in opposing it.

But the Opposition says it will only support a smaller increase and it has the backing of the Greens.

From Canberra, Naomi Woodley reports.

NAOMI WOODLEY: The Treasurer Joe Hockey revealed a surprise bid to increase Australia's debt cap to $500 billion when he outlined the details of the Government's commission of audit last month.

At the time the Opposition questioned why such a large increase was required, and the Shadow Treasurer Chris Bowen says they're still not convinced it's necessary.

CHRIS BOWEN: He arrogantly, arrogantly and nonchalantly announced an increase in the debt cap to half a trillion dollars. Well I've got a news flash Mr Hockey - increases in the debt cap are subject to parliamentary approval. Parliamentary approval he will not get.

NAOMI WOODLEY: That's drawn an immediate response from the Prime Minister. Tony Abbott told Channel Nine that the Labor Party is acting like the Tea Party in Washington - pushing the economy to the brink.

TONY ABBOTT: Having trashed the place, fiscally, the government, the Labor Party, the former government, the now Opposition, they are trying to stop us from fixing the mess. This is utterly dishonourable behaviour.

NAOMI WOODLEY: He says under his leadership the Coalition never stopped Labor from increasing the debt cap when it was in government.

TONY ABBOTT: We were very critical of their policies. We said they were doing the wrong thing by our country. We said they were plunging our children, our grandchildren, deeper and deeper into debt. But we never played fast and loose with this country's economic strength by trying to bung on a Tea Party style situation in Australia. We never did that. Never ever.

NAOMI WOODLEY: But the Shadow Treasurer, Chris Bowen, says the Coalition's record is clear.

CHRIS BOWEN: There's a little thing called Hansard, which records how people vote. And in 2009 and 2012, Liberal Party members of the House of Representatives and the Senate, voted explicitly against moves to increase the debt cap.

NAOMI WOODLEY: And he's adamant Labor isn't being reckless, because it will support an increase of $100 billion - to $400 billion.

But he says without a full mid-year budget update from the Government, nothing higher is justified.

CHRIS BOWEN: We're recognising the need for an increase in the debt cap. We're recognising that very openly and clearly. But Mr Hockey has not and cannot justify his political ploy of increasing Australia's debt limit to half a trillion dollars without releasing his mini-budget.

NAOMI WOODLEY: Labor's amendment will pass the Senate with the support of the Greens. Its leader Christine Milne agrees that the Government should release its debt forecasts to justify the $200 billion increase.

CHRISTINE MILNE: In Opposition, the Coalition said the Government of the day had to justify the extent of the increase of the debt ceiling, because the money has to be repaid. And we agree with that. And that's why we're saying let's have the Government come out and say why they need a $200 billion increase as opposed to $100 billion.

NAOMI WOODLEY: But the Prime Minister says the actions of the previous government mean a $200 billion increase is needed.

NAOMI WOODLEY: But if he wants to resolve the standoff the Treasurer Joe Hockey appears to have limited options.

Either delay a vote on this increase until after the budget update is released, in the hope it will convince Labor and the Greens it's necessary, or come back to the parliament in future to ask for another increase - something he'd hoped to avoid.

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